AIF passporting in United Kingdom

Following the UK’s departure from the EU, in the absence of agreement otherwise between the UK and the EU, all non-UK funds, including EEA AIFs, are classed as third country AIFs in the UK.

Under the Overseas Funds Regime (“OFR”), the UK Treasury has the ability to determine whether a third country jurisdiction and funds established in that jurisdiction are equivalent to a UK authorised fund (these are funds which have been approved by the FCA for marketing to retail investors in the UK). This will allow them to benefit from a simplified process to enable marketing to UK retail investors. At present, only EEA UCITS are recognised as “equivalent.”

EEA AIFs are required (unless they are individually recognised under s. 272 of the Financial Services and Markets Act 2000), to comply with the UK’s National Private Placement Regime and the UK’s financial promotion rules (as applicable) in the same way as AIFMs based in non-EEA (third-country) jurisdictions wishing to market third country AIFs are required to do.

A summary of the UK private placement regime can be found at Private placement rules and law in the UK | CMS Expert Guides.

The National Private Placement Regime is available to any fund established outside the UK which, for legislative purposes (including EEA UCITS) are regarded as being third country AIFs. Unless they successfully apply for recognition under the OFR, AIFMs based in third country jurisdictions wishing to market EEA and/or non-EEA AIFs in the UK will be required to comply with the UK’s National Private Placement Regime, as well as the UK’s financial promotion rules as applicable. Currently, only EEA UCITS can apply to be recognised under the OFR.

The UK does not have a separate regime for pre-marketing. Pre-marketing is subject to the same financial promotion rules as any other marketing of a fund in the UK.

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